Summary of Significant Accounting Policies (Policies)

Principles of Consolidation.
The accompanying condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries
Polarity NV and Majesco Europe Limited. Majesco Europe Limited was dissolved during the year ended October 31, 2016. Significant
intercompany accounts and transactions have been eliminated in consolidation.

Revenue Recognition.
The Company’s software products are sold exclusively as downloads of digital content for which the consumer takes possession
of the digital content for a fee. Revenue from product downloads is generally recognized when the download is made available (assuming
all other recognition criteria are met).

Cash and cash equivalents.
Cash equivalents consist of highly liquid investments with original maturities of three months or less at the date of purchase.
At various times, the Company has deposits in excess of the Federal Deposit Insurance Corporation limit. The Company has not experienced
any losses on these accounts.

Accounts Receivable
and Accounts Payable and Accrued Expenses. The carrying amounts of accounts receivable and accounts payable and accrued expenses
approximate fair value as these accounts are largely current and short term in nature.

Allowance for Doubtful
Accounts. The Company recognizes an allowance for losses on accounts receivable for estimated probable losses. The allowance
is based on historical experiences, current aging of accounts, and other expected future write-offs, including specific identifiable
customer accounts considered at risk or uncollectible. Any related expense associated with an allowance for doubtful accounts
is recognized as general and administrative expense. As of April 30, 2017 and 2016, there was no allowance for doubtful accounts.

Capitalized Software
Development Costs and License Fees. Software development costs include fees in the form of milestone payments made to independent
software developers and licensors. Software development costs are capitalized once technological feasibility of a product is established
and management expects such costs to be recoverable against future revenues. For products where proven game engine technology exists,
this may occur early in the development cycle. Technological feasibility is evaluated on a product-by-product basis. Amounts related
to software development that are not capitalized are charged immediately to product research and development costs. Commencing
upon a related product’s release, capitalized costs are amortized to cost of sales based upon the higher of (i) the ratio
of current revenue to total projected revenue or (ii) straight-line charges over the expected marketable life of the product.

Prepaid license fees represent
license fees to owners for the use of their intellectual property rights in the development of the Company’s products. Minimum
guaranteed royalty payments for intellectual property licenses are initially recorded as an asset (prepaid license fees) and a
current liability (accrued royalties payable) at the contractual amount upon execution of the contract or when specified milestones
or events occur and when no significant performance remains with the licensor. Licenses are expensed to cost of sales at the higher
of (i) the contractual royalty rate based on actual sales or (ii) an effective rate based upon total projected revenue related
to such license. Capitalized software development costs and prepaid license fees are classified as non-current if they relate to
titles for which the Company estimates the release date to be more than one year from the balance sheet date.

The amortization period
for capitalized software development costs and prepaid license fees is usually no longer than one year from the initial release
of the product. If actual revenues or revised forecasted revenues fall below the initial forecasted revenue for a particular license,
the charge to cost of sales may be larger than anticipated in any given quarter. The recoverability of capitalized software development
costs and prepaid license fees is evaluated quarterly based on the expected performance of the specific products to which the costs
relate. When, in management’s estimate, future cash flows will not be sufficient to recover previously capitalized costs,
the Company expenses these capitalized costs to “cost of sales-software development costs and license fees,” in the
period such a determination is made. These expenses may be incurred prior to a game’s release for games that have been developed.
If a game is cancelled prior to completion of development and never released to market, the amount is expensed to operating costs
and expenses. If the Company was required to write off licenses, due to changes in market conditions or product acceptance, its
results of operations could be materially adversely affected.

Costs of developing online
free-to-play social games, including payments to third-party developers, are expensed as research and development expenses. Revenue
from these games is largely dependent on players’ future purchasing behavior in the game and currently the Company cannot
reliably project that future net cash flows from developed games will exceed related development costs.

Prepaid license fees and
milestone payments made to the Company’s third-party developers are typically considered non-refundable advances against
the total compensation they can earn based upon the sales performance of the products. Any additional royalty or other compensation
earned beyond the milestone payments is expensed to cost of sales as incurred.

Property and Equipment.
Property and equipment is stated at cost. Depreciation and amortization is being provided for by the straight-line method
over the estimated useful lives of the assets, generally five years. Amortization of leasehold improvements is provided for over
the shorter of the term of the lease or the life of the asset.

Income Taxes. The
Company accounts for income taxes under the asset and liability method. Deferred tax assets and liabilities are recognized for
the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and
liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities
are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are
expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized
in income in the period that includes the enactment date. The Company evaluates the potential for realization of deferred tax
assets at each quarterly balance sheet date and records a valuation allowance for assets for which realization is not more likely
than not.

Stock Based Compensation.
The Company measures all stock-based compensation to employees using a fair value method and records such expense in general and
administrative expenses. Compensation expense for stock options with cliff vesting is recognized on a straight-line basis over
the vesting period of the award, based on the fair value of the option on the date of grant. For stock options with graded vesting,
the Company recognizes compensation expense over the service period for each separately vesting tranche of the award as though
the award were in substance, multiple awards.

The fair value for options
issued is estimated at the date of grant using a Black-Scholes option-pricing model. The risk-free rate is derived from the U.S.
Treasury yield curve in effect at the time of the grant. The volatility factor is determined based on the Company’s historical
stock prices.

The value of restricted
stock grants is measured based on the fair market value of the Company’s common stock on the date of grant and amortized
over the vesting period of, generally, six months to three years.

Loss Per Share.
Basic loss per share of common stock is computed by dividing net loss attributable to common stockholders by the weighted average
number of shares of common stock outstanding for the period. Diluted loss per share excludes the potential impact of common stock
options, unvested shares of restricted stock and outstanding common stock purchase warrants because their effect would be anti-dilutive
due to our net loss.

Commitments and Contingencies.
We are subject to claims and litigation in the ordinary course of our business. We record a liability for contingencies when
the amount is both probable and reasonably estimable. We record associated legal fees as incurred.

Accounting for Warrants.
The Company accounts for the issuance of common stock purchase warrants issued in connection with the equity offerings in accordance
with the provisions of ASC 815, Derivatives and Hedging (“ASC 815”). The Company classifies as equity any contracts
that (i) require physical settlement or net-share settlement or (ii) gives the Company a choice of net-cash settlement or settlement
in its own shares (physical settlement or net-share settlement). The Company classifies as assets or liabilities any contracts
that (i) require net-cash settlement (including a requirement to net-cash settle the contract if an event occurs and if that event
is outside the control of the Company) or (ii) gives the counterparty a choice of net-cash settlement or settlement in shares
(physical settlement or net-share settlement). In addition, under ASC 815, registered common stock warrants that require the issuance
of registered shares upon exercise and do not expressly preclude an implied right to cash settlement are accounted for as derivative
liabilities. The Company classifies these derivative warrant liabilities on the condensed consolidated balance sheet as a current
liability.

Change in Fair Value
of Warrant Liability. The Company assessed the classification of common stock purchase warrants as of the date of each offering
and determined that certain instruments met the criteria for liability classification. Accordingly, the Company classified the
warrants as a liability at their fair value and adjusts the instruments to fair value at each reporting period. This liability
is subject to re-measurement at each balance sheet date until the warrants are exercised or expired, and any change in fair value
is recognized as “change in fair value of warrant liability” in the condensed consolidated statements of operations.
The fair value of the warrants has been estimated using a Black-Scholes valuation model (see Note 7).

Reverse stock-split.
On July 27, 2016, Majesco Entertainment Company (the “Company”) filed a certificate of amendment (the “Amendment”)
to its Restated Certificate of Incorporation with the Secretary of State of the State of Delaware in order to effectuate a reverse
stock split of the Company’s issued and outstanding common stock, par value $0.001 per share on a one (1) for six (6) basis,
effective on July 29, 2016 (the “Reverse Stock Split”).

The Reverse Stock Split
was effective with The NASDAQ Capital Market (“NASDAQ”) at the open of business on August 1, 2016. The par value and
other terms of Company’s common stock were not affected by the Reverse Stock Split. The Company’s post-Reverse Stock
Split common stock has a new CUSIP number, 560690 406. The Company’s transfer agent, Equity Stock Transfer LLC, acted as
exchange agent for the Reverse Stock Split.

As a result of the Reverse
Stock Split, every six shares of the Company’s pre-Reverse Stock Split common stock was combined and reclassified into one
share of the Company’s common stock. No fractional shares of common stock were issued as a result of the Reverse Stock Split.
Stockholders who otherwise would be entitled to a fractional share shall receive a cash payment in an amount equal to the product
obtained by multiplying (i) the closing sale price of our common stock on the business day immediately preceding the effective
date of the Reverse Stock Split as reported on NASDAQ by (ii) the number of shares of our common stock held by the stockholder
that would otherwise have been exchanged for the fractional share interest.

All common share and per
share amounts have been restated to show the effect of the Reverse Stock Split.

Estimates. The preparation
of financial statements in conformity with accounting principles generally accepted in the United States of America requires management
to make estimates and assumptions that affect the reported amounts of assets and liabilities or the disclosure of gain or loss
contingencies at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods.
Among the more significant estimates included in these financial statements are the recoverability of advance payments for capitalized
software development costs and intellectual property licenses, the valuation of warrant liability, stock based compensation and
the valuation allowances for deferred tax benefits. Actual results could differ from those estimates.

In August 2014, the FASB
issued ASU No. 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern (“ASU
No. 2014-15”) that requires management to evaluate whether there are conditions and events that raise substantial doubt about
the Company’s ability to continue as a going concern within one year after the financial statements are issued on both an
interim and annual basis. Management is required to provide certain footnote disclosures if it concludes that substantial doubt
exists or when its plans alleviate substantial doubt about the Company’s ability to continue as a going concern. The Company
adopted ASU No. 2014-15 on November 1, 2016 and its adoption did not have a material impact on the Company’s financial statements.

In January 2017, the
FASB issued ASU 2017-01, Business Combinations (Topic 805) Clarifying the Definition of a Business. The amendments in this
update clarify the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions
should be accounted for as acquisitions (or disposals) of assets or businesses. The definition of a business affects many areas
of accounting including acquisitions, disposals, goodwill, and consolidation. The guidance is effective for annual periods beginning
after December 15, 2017, including interim periods within those periods. The Company adopted this guidance effective November
1, 2016.

In May 2014, the Financial
Accounting Standards Board (“FASB”) issued an Accounting Standards Update (“ASU”) creating a new Topic
606, Revenue from Contracts with Customers, which broadly establishes new standards for the recognition of certain revenue
and updates related disclosure requirements. The update becomes effective for the Company on November 1, 2018. The Company is reviewing
the potential impact of the statement on its financial position, results of operations, and cash flows.

In February 2016, FASB
issued ASU No. 2016-02, Leases (Topic 842), which supersedes FASB ASC Topic 840, Leases (Topic 840) and provides
principles for the recognition, measurement, presentation and disclosure of leases for both lessees and lessors. The new standard
requires lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether
or not the lease is effectively a financed purchase by the lessee. This classification will determine whether lease expense is
recognized based on an effective interest method or on a straight-line basis over the term of the lease, respectively. A lessee
is also required to record a right-of-use asset and a lease liability for all leases with a term of greater than twelve months
regardless of classification. Leases with a term of twelve months or less will be accounted for similar to existing guidance for
operating leases. The standard is effective for annual and interim periods beginning after December 15, 2018, with early adoption
permitted upon issuance. When adopted, the Company does not expect this guidance to have a material impact on our financial statements.

In March 2016, the FASB
issued ASU No. 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations. The purpose
of ASU No. 2016-08 is to clarify the implementation of guidance on principal versus agent considerations. For public entities,
the amendments in ASU No. 2016-08 are effective for interim and annual reporting periods beginning after December 15, 2017. The
Company is currently assessing the impact of ASU No. 2016-08 on its condensed consolidated financial statements and related disclosures.

In March 2016, the FASB
issued ASU No. 2016-09, Compensation-Stock Compensation (Topic 718), Improvements to Employee Share-Based Payment Accounting.
Under ASU No. 2016-09, companies will no longer record excess tax benefits and certain tax deficiencies in additional paid-in capital
(“APIC”). Instead, they will record all excess tax benefits and tax deficiencies as income tax expense or benefit in
the income statement and the APIC pools will be eliminated. In addition, ASU No. 2016-09 eliminates the requirement that excess
tax benefits be realized before companies can recognize them. ASU No. 2016-09 also requires companies to present excess tax benefits
as an operating activity on the statement of cash flows rather than as a financing activity. Furthermore, ASU No. 2016-09 will
increase the amount an employer can withhold to cover income taxes on awards and still qualify for the exception to liability classification
for shares used to satisfy the employer’s statutory income tax withholding obligation. An employer with a statutory income
tax withholding obligation will now be allowed to withhold shares with a fair value up to the amount of taxes owed using the maximum
statutory tax rate in the employee’s applicable jurisdiction(s). ASU No. 2016-09 requires a company to classify the cash
paid to a tax authority when shares are withheld to satisfy its statutory income tax withholding obligation as a financing activity
on the statement of cash flows. Under current U.S. GAAP, it was not specified how these cash flows should be classified. In addition,
companies will now have to elect whether to account for forfeitures on share-based payments by (1) recognizing forfeitures of awards
as they occur or (2) estimating the number of awards expected to be forfeited and adjusting the estimate when it is likely to change,
as is currently required. The amendments of this ASU are effective for reporting periods beginning after December 15, 2016, with
early adoption permitted but all of the guidance must be adopted in the same period. The Company is currently assessing the impact
that ASU No. 2016-09 will have on its condensed consolidated financial statements.

In April 2016, the FASB
issued ASU No. 2016-10, Revenue from Contracts with Customer. The new guidance is an update to ASC 606 and provides clarity
on: identifying performance obligations and licensing implementation. For public companies, ASU No. 2016-10 is effective for annual
periods, including interim periods within those annual periods, beginning after December 15, 2017. The Company is currently evaluating
the impact that ASU No. 2016-10 will have on its condensed consolidated financial statements.

Disclosure of accounting policy for cash and cash equivalents, including the policy for determining which items are treated as cash equivalents. Other information that may be disclosed includes (1) the nature of any restrictions on the entity's use of its cash and cash equivalents, (2) whether the entity's cash and cash equivalents are insured or expose the entity to credit risk, (3) the classification of any negative balance accounts (overdrafts), and (4) the carrying basis of cash equivalents (for example, at cost) and whether the carrying amount of cash equivalents approximates fair value.

Disclosure of accounting policy regarding (1) the principles it follows in consolidating or combining the separate financial statements, including the principles followed in determining the inclusion or exclusion of subsidiaries or other entities in the consolidated or combined financial statements and (2) its treatment of interests (for example, common stock, a partnership interest or other means of exerting influence) in other entities, for example consolidation or use of the equity or cost methods of accounting. The accounting policy may also address the accounting treatment for intercompany accounts and transactions, noncontrolling interest, and the income statement treatment in consolidation for issuances of stock by a subsidiary.

Disclosure of accounting policy for computing basic and diluted earnings or loss per share for each class of common stock and participating security. Addresses all significant policy factors, including any antidilutive items that have been excluded from the computation and takes into account stock dividends, splits and reverse splits that occur after the balance sheet date of the latest reporting period but before the issuance of the financial statements.

Disclosure of accounting policy for income taxes, which may include its accounting policies for recognizing and measuring deferred tax assets and liabilities and related valuation allowances, recognizing investment tax credits, operating loss carryforwards, tax credit carryforwards, and other carryforwards, methodologies for determining its effective income tax rate and the characterization of interest and penalties in the financial statements.

Disclosure of accounting policy pertaining to new accounting pronouncements that may impact the entity's financial reporting. Includes, but is not limited to, quantification of the expected or actual impact.

Disclosure of accounting policy for long-lived, physical assets used in the normal conduct of business and not intended for resale. Includes, but is not limited to, basis of assets, depreciation and depletion methods used, including composite deprecation, estimated useful lives, capitalization policy, accounting treatment for costs incurred for repairs and maintenance, capitalized interest and the method it is calculated, disposals and impairments.

Disclosure of accounting policy for trade and other accounts receivable, and finance, loan and lease receivables, including those classified as held for investment and held for sale. This disclosure may include (1) the basis at which such receivables are carried in the entity's statements of financial position (2) how the level of the valuation allowance for receivables is determined (3) when impairments, charge-offs or recoveries are recognized for such receivables (4) the treatment of origination fees and costs, including the amortization method for net deferred fees or costs (5) the treatment of any premiums or discounts or unearned income (6) the entity's income recognition policies for such receivables, including those that are impaired, past due or placed on nonaccrual status and (7) the treatment of foreclosures or repossessions (8) the nature and amount of any guarantees to repurchase receivables.

Disclosure of accounting policy for revenue recognition. If the entity has different policies for different types of revenue transactions, the policy for each material type of transaction is generally disclosed. If a sales transaction has multiple element arrangements (for example, delivery of multiple products, services or the rights to use assets) the disclosure may indicate the accounting policy for each unit of accounting as well as how units of accounting are determined and valued. The disclosure may encompass important judgment as to appropriateness of principles related to recognition of revenue. The disclosure also may indicate the entity's treatment of any unearned or deferred revenue that arises from the transaction.

Disclosure of accounting policy for stock option and stock incentive plans. This disclosure may include (1) the types of stock option or incentive plans sponsored by the entity (2) the groups that participate in (or are covered by) each plan (3) significant plan provisions and (4) how stock compensation is measured, and the methodologies and significant assumptions used to determine that measurement.